Dodd-Frank rollback raises the asset threshold for systemic financial institutions from $50 billion to $250 billion.

Peter Prince

2018-05-21 07:39:00 Mon ET

Dodd-Frank rollback raises the asset threshold for systemically important financial institutions (SIFIs) from $50 billion to $250 billion. This legislative change exempts some banks from annual stress tests and living wills that the Obama administration designed as a safety valve to prevent another major financial calamity. As a result, this structural regime switch will provide smaller financial institutions with primary relief from the strict rules and regulations that apply to most Wall Street banks.

President Trump affirms his clear intention to sign this bill into law. The Dodd-Frank rollback tends to benefit non-systemic financial institutions, community banks, and other small lenders. However, Congress expresses the consensus view that most banks should be subject to substantially higher core equity capital requirements to safeguard against extreme losses in rare times of financial stress.

As financial intermediary capital covaries with both aggregate credit supply and household debt fluctuations, these ebbs and flows cause real business cycles and financial market fluctuations. Sticky prices and interest rates can persist over the interim period, and transitional dynamism manifests in real macro movements such as real GDP expansion, employment, capital investment, industrial production, and bank balance sheet expansion.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

David Colander and Craig Freedman argue that economics went wrong when there was no neoclassical firewall between economic theories and policy reforms.

Becky Berkman

2023-11-28 11:35:00 Tuesday ET

David Colander and Craig Freedman argue that economics went wrong when there was no neoclassical firewall between economic theories and policy reforms.

David Colander and Craig Freedman argue that economics went wrong when there was no neoclassical firewall between economic theories and policy reforms. D

+See More

House of Representatives considers a government expenditure bill with border wall finance and so sets up a shutdown stalemate with Senate.

Laura Hermes

2018-12-23 13:39:00 Sunday ET

House of Representatives considers a government expenditure bill with border wall finance and so sets up a shutdown stalemate with Senate.

The House of Representatives considers a government expenditure bill with border wall finance and therefore sets up a shutdown stalemate with Senate. As fre

+See More

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Joseph Corr

2019-09-05 09:26:00 Thursday ET

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America. Firs

+See More

Facebook introduces a new cryptocurrency Libra as a fresh medium of exchange for e-commerce.

Dan Rochefort

2019-07-21 09:37:00 Sunday ET

Facebook introduces a new cryptocurrency Libra as a fresh medium of exchange for e-commerce.

Facebook introduces a new cryptocurrency Libra as a fresh medium of exchange for e-commerce. Libra will be available to all the 2 billion active users on Fa

+See More

President Trump meets Chinese President Xi for better economic reforms.

Rose Prince

2017-03-21 09:37:00 Tuesday ET

President Trump meets Chinese President Xi for better economic reforms.

Trump and Xi meet in the most important summit on earth this year. Trump has promised to retaliate against China's currency misalignment, steel trade

+See More

Several recent events explain why Trump may undermine multilateral world order.

Joseph Corr

2018-06-03 07:35:00 Sunday ET

Several recent events explain why Trump may undermine multilateral world order.

Several recent events explain why Trump may undermine multilateral world order. First, Trump withdraws the U.S. from the 12-nation Trans-Pacific Partnership

+See More